Simplilearn Spent INR 1.38 To Earn Every Rupee From Ops In FY23

Bengaluru-based edtech Simplilearn’s consolidated net loss widened 36.5% in the financial year 2022-23 (FY23) to INR 244.2 Cr from INR 178.9 Cr in FY22, hurt by a sharp rise in certain expense heads.

The Blackstone-backed startup registered a 50.3% rise in its operating revenue to INR 684 Cr during the year under review from INR 455.2 Cr in FY22.

Founded in 2010 by Krishna Kumar, Simplilearn earns a majority of its revenue from the sale of services by offering online upskilling courses across disciplines, including AI and ML, data science, cyber security, and cloud computing, to students and working professionals. It derives its revenues by providing learning programmes via both online and offline channels.

With a presence in San Francisco, California, and Bengaluru, Simplilearn claims to offer over 400 courses and more than 2,500 live classes every month.

Including interest income and interest expense, Simplilearn’s total revenue surpassed the INR 700 Cr mark in FY23 from INR 465.4 Cr a fiscal ago.

The startup’s EBITDA margin improved to about -29% in the year from -35% in FY22.

We must note that its FY23 earnings are also expected to have had some impact due to the performance of US-based bootcamp edtech startup Fullstack Academy, which it acquired during the year.

During the deal announcement, Simplilearn said that Fullstack Academy would drive its revenue growth up to $200 Mn in FY24.

Zooming Into Expenses

Simplilearn’s total expenses jumped almost 47% year-on-year (YoY) to INR 944.4 Cr, with employee benefit and ad expenses accounting for 31% and 32% of the total spending.

The increased expenses were in line with the company’s plans to grow its business globally after securing $45 Mn in a fresh funding round led by GSV Ventures.

Employee Cost: The edtech startup’s employee cost jumped almost 42% to INR 288.6 Cr in the reported period from INR 203.5 Cr in FY22.

In this, INR 210 Cr was spent towards salaries and wages, registering more than a 29% jump year-on-year (YoY).

However, in line with the broader edtech trend in the country, Simplilearn also laid off around 200 employees in December 2023, citing poor performance.

Advertising & Promotional Expenses: Simplilearn’s ad expenses increased 28.9% to INR 301.5 Cr in FY23 from INR 233.8 Cr the year before. 

Cost Of Materials Consumed: The edtech startup’s cost of services also jumped 51.5% YoY to INR 210.9 Cr in FY23.

Subscriptions Membership Fees: Simplilearn’s spending in this bucket also jumped over 49% YoY to INR 17.7 Cr during the year under review.

The edtech startup’s cash and cash equivalents at the end of FY23 stood at INR 106.8 Cr, down from INR 240 Cr in the corresponding period of the previous fiscal.